Tesla Motors targets masses with cheaper Model 3 electric car

Tesla Motors chief executive Elon Musk confirmed the Model 3, a forthcoming electric car that will cost less than half its coveted Model S. Can a cheaper Tesla Motors model woo a broader public still wary of electric cars?

Elon Musk, CEO of Tesla Motors, waves during a news conference to mark the company's delivery of the first batch of electric cars to Chinese customers in Beijing earlier this year. Tesla Motors' Elon Musk confirmed the cheaper Model 3 electric car in an interview with Auto Express Wednesday.

Having made a splash in the luxury auto market, the California-based company is now looking to broaden its horizons – and win over a public that has been slow to abandon its largely gas-powered driving habits. Many Americans are wary of the high price and limited range that tends to come with electric cars. With its new Model 3, Tesla Motors hopes to address both those issues with a car that offers the same range as its more expensive version, at a fraction of the price.

In the interview, Mr. Musk confirmed the cheaper electric car will be called the Model 3, and will be revealed in 2016 and on sale by 2017. It will likely sell for about $35,000, Musk says, although its unclear what features will be included or left out of the base price.

This electric car will be cheaper than the Model S and Model X because it will use cheaper battery technology from Tesla’s Gigafactory, according to Auto Express. The company is still determining where it will locate its sprawling new battery factory.

North America has the largest regional market for plug-in electric vehicles (PEVs), with estimated 2013 sales of slightly less than 100,000, according to market research and consulting team Navigate Research. The number of PEVs on roads in the United States will grow from nearly 296,000 in 2014 to more than 2.7 million in 2023, according to projections by Navigant. Still, hybrid cars and full-electric cars have only made up about 3.5 percent of total US car sales so far in 2014, according to the Electric Drive Transportation Association, an industry group.

To be sure, there are plenty of other cars that are cheaper than the Model 3 – even electric cars such as the Nissan’s $28,980 Nissan Leaf S. Generally-speaking, electric cars are more expensive upfront than gasoline-based cars, even though drivers may save more over the longterm from charging an electric car versus filling up gas in a regular vehicle.

Tesla also needs more automakers and consumers to be interested in electric cars and understand the potential environmental benefits, John O’Dell of Edmunds.com told the Monitor in June. Electric cars can also be up to three times as efficient as gasoline-powered ones, according to Consumer Reports.